Malaysia is expected to go into an economic recession in the next 4 – 6 months, according to a report by The Department of Statistics Malaysia (DOSM).
The report revealed a large number of businesses are closing down due to cashflow constraints, with business registrations falling significantly — nearly 4X in April as compared to March,
“Business registration during the same period fell by 90.3 per cent to 1,854. Meanwhile, for the Limited Liability Partnership (LLP), 38 businesses were registered in April compared to 242 in the previous month.”
“The outbreak has caused the temporary closure of businesses, where they faced the risk of immediate cash flow constraints as their earnings decreased”, mentioned chief statistician of the Malaysian Economic Statistics Review (MESR), Datuk Seri Mohd Uzir Mahidin
The tourism industry was one of the first to be severely impacted by the pandemic, with tourist numbers falling since January — creating a domino effect on other industries such as aviation, hospitality, and more.
The real estate industry has also ground to a halt, especially on the retail segment as people hold back spending due to economic slow-down fears.
Furthermore, trade with its biggest trading partner, China, has taken a significant hit due to global supply chain disruptions.
With Malaysia’s current economy still relying heavily on commodities and low-skill-level industries, it will take a considerable amount of time to up-skill workers to adapt to the fast-paced digital world.